Buyers will contend with a different, more expensive level of service from ride-hail and chauffeured transportation providers as both sectors manage the slow return of drivers for passenger ground transportation services amid increasing demand for them.
Chauffeured car providers laid off a significant share of their drivers in 2020 and, in the case of ride-hail, drivers left their platforms. Since then, drivers have been reluctant to return to both industries as economies open up. There’s still concern around virus transmission, but many drivers have left the industry for more lucrative opportunities delivering products. Some companies say the ongoing $300 weekly supplement to federal unemployment benefits has helped to keep drivers away longer. At press time, 25 states have discontinued those benefit, with most cut off dates effective in June.
At the same time, ride-hail companies and chauffeur providers are reporting a demand increase and project it will continue to accelerate in the months ahead.
The demand-supply mismatch may come to an end as more drivers get vaccinated and suppliers increase wages. Cash-rich ride-hail companies, supported by private investors, may be in a better position than chauffeured ground transportation providers to entice drivers back with financial incentives or a wage increase. However, buyers will need to brace for higher prices and potentially longer wait times. Chauffeured providers also are paying their drivers more, which translates into higher prices for the customer.
As corporates implement return-to-office and return-to-travel strategies this year, they will have to be proactive about ensuring drivers in ride-hail and chauffeur services are implementing sanitation and cleanliness standards in their vehicles. The National Limousine Association has not modified its recommended hygienic protocols even as the U.S. Centers for Disease Control and Prevention guidelines have changed. The NLA still recommends mask requirements for drivers and passengers, thorough cleaning cycles with a hospital grade disinfectant for vehicles within 30 minutes of completing a trip, mandatory glove use while handling luggage and accessible hand sanitizers. The association acknowledged that as CDC recommendations change, however, local conditions may have more sway over local practices. If buyers have preferred practices, they should discuss them with their preferred supplier candidates.